One North Korean Sector Showing Signs of Health: Insurance

North Korea, not known as the world’s most transparent country, has put some of its financial details online.

The Korea National Insurance Corp., North Korea’s state insurance company, recently launched a website that includes financial reports for a few years through 2012.

There’s no way to check if the figures are real, but assuming that they are, the insurer appears to be doing fairly well. Premiums and its net worth are both rising, although profits have slipped in the last couple of years. All figures are in North Korean won, which is hard to convert because of wild differences in the official exchange rate and black-market rates. Going by the former, KNIC made a profit of around $40 million in 2012.

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One stand-out figure is underwriting income in KNIC’s life-insurance business, which more than doubled in 2012. It’s tempting to connect that with the ascent to power of Kim Jong Un that year and uncertainties among the elite—the kind of people who could afford life insurance–about their own future.

After taking power, Mr. Kim began a process of replacing many senior officials from his father’s regime. By late last year, more than half of senior positions in the ruling party and military had new faces and changes have continued this year.

South Korean media often run impossible-to-verify reports that senior officials are disposed of with gruesome force, such as via mortar round or flamethrower. The highest-profile execution—this time confirmed by North Korea—was that of Mr. Kim’s uncle Jang Song Thaek late last year.

KNIC’s shady past has been revealed through interviews with North Korean defectors, including Kim Kwang Jin, who once worked as a manager for the company before defecting and is now an academic in Seoul.

In a 2009 interview with the Washington Post, Mr. Kim said that KNIC worked to get foreign companies to accept high premiums to reinsure KNIC policies. North Korea would then take advantage of common North Korean disasters such as floods and mining accidents to claim payouts.

“The major point of the reinsurance operation is that they are banking on disaster,” he said. “Whenever there is a disaster, it becomes a source of hard currency.”

Mr. Kim said annual revenue from North Korea’s reinsurance claims was about $50 million to $60 million. That money was used to scout out potential disasters inside North Korea and buy more reinsurance on the global market, he said.

The KNIC website has little other information but does have postal and email contact details. Korea Real Time has sent questions about the company and allegations against it and will update this article if there is a reply.